MNE approaches related to expatriates.
Different organisations have different approaches when it comes to operating and recruiting when operating abroad.
There are four main approaches for when a MNE or MNC tries to fill their available positions when operating abroad based on who they employ.
The Ethnocentric approach results in key roles being taken by Parent Company Nationals (PCN’s)
The Polycentric approach is where home country nationals are hired to manage the subsidiaries in their home country and PCN’s take the roles in the headquarters or top key positions.
The Geocentric approach tries to find the best people for the key jobs throughout the organisation as a whole discounting nationality.
The regiocentric approach to international recruitment, where a MNC will divide its operation into geographical regions and will transfer staff among these regions.
(Dowling et al)
There is considerable of study relating to the difficulties different country organisation experience with their expatriates but less study on Chinese MNE’s operating outside of China.
The top 10 most important Chinese companies operating in the UK typically have an Ethnocentric approach to their recruitment. These includes companies such as the Bank of China and China Eastern airline, both state owned enterprises.
The main reasons for this approach are a mixture of co-ordination, control and experience of trouble shooting within their roles. (Shen Jie, 2006,)
Recruitment of expatriates adds another layer of complexity when trying to find the right candidate for the role. There also needs to be taken into consideration when trying to find the right person. It is difficult to know how that person will perform within a organisation staffed by different country nationals or how he will perform abroad in a different country other than his own. It is found that Chinese expatriates in the above mentioned companies typically have a low failure rate of 4% with regards to premature return to their own home country (Tung, 1984), especially in comparison to American expatriates working abroad which can be as high as 30%-50%. UK expats typically have a failure rate of 5-10%. Brewster (1988, cited in Jie Shen & Edwards, 2004, pp. 6)
Conclusion
Whether in china or the UK with regards to HR recruitment a company will always need to make careful consideration to remain competitive.
Chinese managers still seem to stick to traditional methods or “old ways” either through guanxi or nepotism with regards to recruiting staff although western HR methods are being adopted. Discrimination based on age also being a more significant issue with China’s aging population and discrimination in recruitment will need to be enforced and dealt with properly.
This could cause in the future for Chinese firms operating abroad or a home to be less competitive compared to their western counterparts.
Western companies seem to allow a more efficient transfer of people , either through online recruitment methods or the lack of barriers to enter new organisations, so the best person is found for the right position. This will increase the competitiveness of western firms and still put the Chinese MNE’s at a disadvantage.
Chinese MNE’s operating abroad will need to be more open to using the talent and understanding of the HCN’s to be successful and their recruitment practises will need to brought in line with western methods although still probably keeping some of their Chinese characteristics.
I see this convergence as inevitable.
Bibliography
Bratton, J. & Glod, J. (2007). Human Resource Management: Theory and Practice. 4th ed., Palgrave Macmillan